By Matthew Russell Lee, Patreon, Thread Video
Honduras - The Source - The Root - etc
SDNY COURTHOUSE, Jan 1 – Turkey's Halkbank officially gave up its strategy of refusing to official appear in the US District Court for the Southern District of New York criminal case against it, and on February 25 appeared and agreed to be indicted. Inner City Press live tweeted it here, and below.
Since August 21 Inner City Press has been looking into a civil case against Halkbank in the SDNY, for the bank's "arm in arm" work with Iran. That's from a sealed complaint, for which the Gibson Dunn law firm was SDNY Judge J. Paul Oetken for additional time to serve Halkbank under the Hague Convention. It was granted by SDNY Judge Denise L. Cote.
On August 21, yet more names were added to the case. The plaintiffs are individuals who are direct victims and surviving family members of the Embassy Bombings, Beirut Bombing, Jerusalem Bombing Atzmona Attack, 2003 Bus Bombing and two related attacks on U.S. service members serving in Iraq.
The complaint says Halkbank acquired its Iranian accounts in 2004, when it merged with Pamuk Bank, a Turkish bank with long-standing ties to Iran. The plaintiffs are suing for rescission of fraudulent conveyances, and under the Terrorism Risk Insurance Act. The schedule is on Patreon here.
Now on February 16, Judge Cote has ordered that "Halkbank's September 25, 2020 motion to dismiss is conditionally granted... A significant majority of the shares in Halkbank -- greater than 75 percent of the outstanding shares -- are owned by the Turkey Wealth Fund, while the remaining shares are publicly traded. The Turkey Wealth Fund, in turn, is controlled by the Turkish government. Halkbank is subject to other mechanisms of control by the Turkish government: the Halkbank Board of Directors is elected by the Turkish General Assembly, and the Turkish Ministry of Treasury and Finance supervises Halkbank’s operations. ..Since the plaintiffs’ choice of forum is not entitled to significant deference and Turkey is an adequate alternative forum for this litigation, the final step of the forum non conveniens analysis is the weighing of the relevant private and public interest factors. The Second Circuit has described the private interest factors as including “the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; . . . and all other practical problems that make trial of a case easy, expeditious and inexpensive.” Iragorri, 274 F.3d at 73-74 (citation omitted). Public interest factors “include administrative difficulties associated with court congestion; the unfairness of imposing jury duty on a community with no relation to the litigation; the interest in having localized controversies decided at home; and avoiding difficult problems in conflict of laws and the application of foreign law.” Aguinda, 303 F.3d at 480.
Here, the private interest factors weigh strongly in favor of litigating this case in Turkey. The underlying facts in this litigation involve an alleged fraudulent scheme conducted in large part by a Turkish bank and its Turkish employees in Turkey. The relevant evidence is largely in Turkey. Apart from Zarrab and Atilla, who are incarcerated in the United States for conduct related to the scheme, the potentially relevant witnesses are in Turkey or the surrounding region, as well. These potential witnesses are beyond the subpoena power of this Court. Trying this case in the United States would not be easy, expeditious, or inexpensive. The plaintiffs take issue with very little of this assessment. They argue that U.S. prosecutors have possession of relevant documentary evidence, but that does not make such evidence accessible to civil litigants in the United States. Plaintiffs also contend that “potential” witnesses will be unable to enter Turkey. The only potential witness identified by the plaintiffs is a former Turkish law enforcement official involved in an investigation into Halkbank who was allegedly forced to flee Turkey. Plaintiffs do not explain why the testimony of this particular law enforcement official is necessary.
Otherwise, the plaintiffs’ submission does not contest that the witnesses to the alleged Halkbank scheme largely reside in Turkey and are beyond this Court’s jurisdiction. The public interest factors also weigh heavily in favor of litigating in Turkey. There is almost no connection between this case and New York. Plaintiffs have demanded a jury trial in this action, and it would make little sense to burden a New York court and jury with litigation of this action. By contrast, Turkey has a more significant interest in hearing this action, which involves a significant Turkish financial institution. Additionally, this case presents a choice of law dispute, which further weighs in favor of litigating in Turkey. Halkbank argues that, even if the litigation proceeds in this Court, New York’s choice of law rules require the application of Turkish law to the plaintiffs’ fraudulent conveyance claims. The plaintiffs contend that New York fraudulent conveyance law applies. The presence of this choice of law dispute and the potential application of Turkish substantive law is a further basis for dismissal, since “the public interest factors point towards dismissal where the court would be required to untangle problems in conflict of laws, and in law foreign to itself.” Reyno, 454 U.S. at 251 (citation omitted).
IV. Conditions of Dismissal Because the plaintiffs’ choice of forum commands minimal deference, Turkey is an adequate alternative forum for this action, and the private and public interest factors weigh strongly in favor of dismissal, this action is dismissed on the grounds of forum non conveniens. In order to ensure that this case is eventually heard on the merits in Turkey, however, conditional dismissal is proper. Blanco, 997 F.2d at 984 (“[F]orum non conveniens dismissals are often appropriately conditioned to protect the party opposing dismissal.”) Dismissal shall be conditioned on Halkbank’s agreement to accept service in Turkey, submit to the jurisdiction of Turkish courts, and waive any statute of limitations defense that may have arisen since the filing of this action. The parties shall submit an agreement to litigate in Turkey in accordance with these conditions. A scheduling order accompanies this Opinion."
Full order on Inner City Press' DocumentCloud here.
This case is Owens et al. v. Halbank,
20-cv-02648 (Cote).
